Household Economics of Transport: The Humble Bicycle

This is the third in a series looking at the economics of transport in Hamilton. Previous posts have addressed the costs of the private car and the Hamilton bus service. Today’s post concerns the humble bicycle, an increasingly popular sight on Hamilton’s streets.

The Bicycle Option

Cyclists at red light

Ordinary people getting around in an economic and fun way

A good quality bicycle can be bought new for about $500-1,000, and with regular servicing and replacement of components when worn, should last more than 5 years and still have some resale value.

Item Costs over 5 year period
New bicycle $ 1,000
Resale value of bike after 5 years
(subtracted from costs)
$ 200
Subtotal $ 800

So what would be the net cost of using a bicycle for most of our transport needs around Hamilton? For the class of bike we’re considering, the answer depends to a large extent on how far we ride and how we take care of it.

Let’s say we take the bike to be serviced at a local bike shop every 6 months, which service includes replacement of the chain. Every 2nd service (i.e. once per year) we also replace the cassette sprockets on the rear wheel, rotate the front tyre to the rear and fit a new tyre to the front. Any other parts we simply replace on an as needed basis.

Item Costs over 5 year period
1 x $100 workshop full service and 1 x $50 check-up each year $ 750
2 x $50 replacement chains each year* $ 500
$50 for 1 replacement cassette each year* $ 250
$75 for 1 new puncture-resistant tyre each year $ 375
Subtotal for planned maintenance $ 1,875
Other maintenance $ 500
Total maintenance cost for 5-year period $ 2,375
Yearly cost $ 475

* According to Zinn & the Art of Road Bike Maintenance, chains can last up to 5,000 miles (~8,000 kms) if well maintained, and cassettes and chain rings almost indefinitely – a potential saving of $500 on above figures if achieved.

I personally use a bicycle for 99% of all of my transport needs – rain or shine, day or night – and my yearly costs are probably no more than half the above sum. However, the above numbers represent a diligent and pro-active maintenance regime for around 100 kms of cycling per week. Naturally, for a higher weekly distance our maintenance costs would be some multiple of this figure.

We would probably want to purchase a few accessories to make our cycle trips more pleasant too:

Item One-off costs
A pair of quality waterproof pannier bags (e.g. Ortlieb) $ 250
A high-quality bicycle lock $ 50
A rear luggage rack $ 50
Front and rear mudguards (assuming bike didn’t come with them) $ 50
High quality front and rear bicycle lights $ 100
High quality bike helmet $ 100
Breathable waterproof trousers and jacket, for those inclement weather days! $ 300
Subtotal for accessories $ 900

In summary, our costs for the 5 year period are likely to look something like this:

Item Costs over 5 year period
Bike purchase $ 800
Maintenance costs $ 2,375
Accessories $ 900
Total $ 4,075
Yearly cost $ 815

So by this very conservative estimate, the bike option seems to come out somewhere between one third to one fifth the cost of the car options. Recall also that the car costings did not factor in parking, which can be as much as $30-40 per week for some, which alone adds up to more than the bike option!

In any case, opting for the bike leaves us plenty of money in the kitty for occasional use of intercity transport, rental cars and the like. And there’s a lot of expense that could be trimmed from the cycling option by opting for a cheaper bike and/or doing one’s own servicing – a couple of years ago I picked up a bike for $30 from the recycling centre and have done hundreds of kilometres on it with minimal maintenance.

There are also some additional benefits of cycling, which I’ve not factored in to the above calculations.

Compound Interest

Compared with the car options, the smaller initial outlay involved in purchasing a bike and accessories allows us to keep perhaps $3,000 of our initial $5,000 in the bank earning interest. At 4% compound interest, that would leave us around $650 better off by the end of the 5 year period.

Health Benefits

For the health-conscious, using a bike for most journeys would likely make it unnecessary to pay for a gym membership. Indeed, according to this NZ Transport Agency study, the health benefits to the cyclist are substantial, and provide net benefit per kilometre travelled as below:

Benefits of Active Modes

NZTA estimates of benefits of Active Modes to travellers

So… Why Don’t More People Cycle in Hamilton?

Some people will simply never consider alternatives to their beloved cars, and that’s absolutely fine because we don’t need a 100% mode share for cycling to make a big difference to our city. Equally, many people would be delighted to have the option of saving a good deal of money and keeping better physical health if only it was more convenient or safer. If we could achieve even a modest shift in modeshare from car journeys to cycle journeys it would free up Hamilton’s roads a great deal and allow a reduction in the council’s roading budget for capacity upgrades and maintenance.

The improvements to Hamilton’s liveability and business environment would be harder to quantify in monetary terms, but would be marked; a recent study in Auckland found that a bike corral in Ponsonby could generate spending of $684 per hour, compared with just $70 per hour for the single car park it took the place of. The monetary savings inherent in using a bicycle for transport, combined with cyclists’ more localised journey patterns make for a formidable combination that supports the CBD and local businesses. When considered alongside cycling’s traffic congestion-reducing potential it becomes clear that cycling is an absolutely unrivaled proposition for city councils.

Studies have found that the biggest obstacle to more people using bicycles for their everyday transport is the perception of danger. Hamilton has a comprehensive network of painted on-road cycle lanes that surpasses many other NZ cities, and indeed Hamilton City Council should be praised for their efforts in making what has the potential to be an eminently cycleable city a more appealing prospect to cycle around. However, international research has shown that a large proportion of the population tend to be less confident cyclists, liable to be intimidated by fast-moving multi-tonne vehicles passing just the other side of a painted line on the roadway. For this reason, Hamilton Urban Blog is pushing for more segregated cycle ways and off-road routes such as the the proposed Hamilton Green Ring and the excellent Waikato River paths. We are eagerly awaiting more details of the council’s forthcoming cycling strategy!

5 comments on “Household Economics of Transport: The Humble Bicycle

  1. My travel to work (100km per week) cost per year are about $115 ($75 one tyre+$20 light each year+$20 brake pads)
    I’ll buy a new bike about every 5 years $500 to $600. I never get it service. After 5 years it is stuffed and has no value.

    • Your poor bicycles Peter!

      For me part of the joy of bicycles is that they are such elegantly simple machines and therefore very easy to maintain and repair. I can’t ever imagine being able to do the same for my car. A bike I ride regularly as a commuter is about 65 years old and still has plenty of life in her.

  2. Hi Ash
    I am using per km cost in future post, these are the numbers I am getting.
    The AA puts car from $1.08-$2.37 for 5,000 km per year, to $0.53-$1.08 for 14,000 km
    You have given cost at $0.24 to $0.28 for 7,500 km per year. Which seams low when compared to Cycling at $815 per year / 7,500 km per year equals $0.11 per km, or $0.16 for 100 km per week. May be the bicycle needs a cost range added.

  3. I’m new to Hamilton having just relocated back from living and working in Asia and have just bought a bike to commute to work in… looking forward to reading your blog on the cycling scene in Hamilton and finding out how we can get forward movement in the Council on improving the cycle ways and loops in the city!


Leave a Reply

Your email address will not be published.